The Government has confirmed that mayors and local leaders in England will be given the power to introduce a levy on overnight stays. Our Chief Executive, Steven Medway, has set out what this means for Knightsbridge.

On 10 September 2026, the Government announced that mayors and local leaders in England will be able to introduce an Overnight Visitor Levy, a charge on overnight stays, as part of its wider devolution agenda. In London, the power will sit with the Mayor of London.

What has been announced

Local leaders will decide whether to introduce a levy in their area and how the money raised is spent, in consultation with residents and local businesses. The levy must be charged as a percentage of the cost of accommodation rather than as a flat fee, and hotels and other accommodation providers will be responsible for paying it to the relevant authority.

Local leaders will also be able to set exemptions, while temporary accommodation, shelters and refuges will not be subject to the levy. Legislation will be introduced in due course, and the Government expects spending plans to be set out by early 2028.

The Mayor of London has welcomed the new power and said he will work with London’s boroughs, accommodation providers and hospitality and tourism businesses before any final decisions are taken.

Our response

Steven Medway, Chief Executive of the Knightsbridge Partnership, said:

“Our members have real concerns about the impact an overnight visitor levy will have on a tourist economy already under significant cost pressure, and few places are more exposed than Knightsbridge. Without VAT-free shopping, London is already a more expensive choice for international visitors, and we shouldn’t give high-value visitors who contribute so much to our economy another reason to shorten their stay or go elsewhere. Any levy must be designed with the hotel and tourism industry, not simply applied to it.

“We welcome the principle that local leaders and local businesses are best placed to decide how tourism revenue is spent. We’ve seen this approach proven through our own ring-fenced investment into Knightsbridge and our £75m Place and Public Realm Strategy which is being delivered in partnership with the private sector. But Government must guarantee that funds are retained locally and reinvested in the places that generate them, tackling the day-to-day impacts of tourism such as street cleansing, safety and security.

“We’re committed to working with Government, the Mayor and local leaders to get this right, ensuring businesses have a genuine say in how money is spent and that the levy strengthens our visitor economy rather than becoming a further burden on it.”

Our position aligns with that of High Streets UK, the pro-growth, nationwide partnership of business representatives of which the Knightsbridge Partnership is a member.